The Champion

September-October 2012 , Page 58

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Let Counsel Beware: Overzealous Bankruptcy Practice Can Lead To a Prison Cell

By Joel M. Shafferman

Bankruptcy cases and criminal prosecutions are close cousins. Desperation is a hallmark of both. White collar practitioners, in particular, often deal with clients forced into bankruptcy by criminal investigation or prosecution. In fact, dedicated defense counsel may feel a sense of duty to assist the client in filing for bankruptcy. But counsel must be aware that a client’s desire to protect dwindling assets, or abuse the bankruptcy system for unlawful gain, can quickly lead to fresh criminal charges. Lawyers who cross into the bankruptcy realm should do so fully cognizant of the criminal landmines.

Attorneys representing debtors, especially in consumer bankruptcy cases, practice under numerous ethical and statutory duties intended to enforce a standard of professionalism on the field. When attorneys fail to live up to their ethical and legal obligations, they prejudice their clients and other parties in interest, and subject themselves to civil and criminal liability for

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